Question

The total cost of goods available for sales with a company during the current year is Rs.$12,00,000$ and the total sales during the period are Rs.$13,00,000$. Gross profit margin of the company is $331/3\%$ on cost. The closing inventory for the current year would be:

• A. Rs.$4,00,000$
• B. Rs.$3,00,000$
• C. Rs.$2,25,000$
• D. Rs.$2,60,000$

Answer 1

Answer: (C)

Rs.$2,25,000$

Sales = Rs.$13,00,000$
G.P Margin cost is $1/3$ and on sale it will be $1/4$
Cost of goods sold = $13,00,000\times 3/4=9,75,000$
Closing stock = Total goods available for sale - Cost of goods sold
= $12,00,000-9,75,000=Rs.2,25,000$